If you are considering doing business in Thailand and you have been around the bars of Bangkok, Pattaya or Phuket you will no doubt have heard some pretty negative stuff regarding what you CAN’T do in Thailand.
Fortunately, most of these stories are simply untrue and maybe a reflection on how things used to be, rather than how they are now. Thanks in no small part to Thailand’s Board of Investment (BOI), there are lots of fantastic opportunities for foreign business owners in Thailand.
If your company becomes BOI registered there are a whole host of benefits out there. These include being able to own land, having taxed waived for up to 8 years and the hiring of foreign employees is a great deal easier. These are just a FEW of the benefits of owning a Thai company that has been certified by the BOI.
So what is the BOI?
The chances are that you have probably heard of the BOI but know very little about what they actually do. The BOI is Thailand’s Board of Investment, a government body that was set up purely to encourage overseas investment in Thailand. A BOI company can be majority owned by Non-Thais as well as having all of the advantages that we outlined above.
If your business is BOI registered the chances of success are even greater than they would be if you simply set up a Thai Private Limited Company – and we already know that there are lots of opportunities out there for foreigners. The BOI was originally established back in 1997 to attract both foreign and local entrepreneurs within a select group of industries.
One of the main purposes was to decentralise Thailand’s industrial base and spread investment across the country, giving a fairer distribution of wealth as well as encouraging growth in some of the country’s poorest regions. So far, the BOI has encouraged the development of industry in several key locations which, in turn, has encouraged the nurturing of a skilled local labour market. As labour is relatively cheap in Thailand this has created even more incentives for businesses and individuals to invest in Thailand.
Here are some of the key advantages:
There are a number of tax incentives that are available to businesses including tax being waivered for up to 8 years as well as possible exemptions or reductions in the import duties that the company is liable for. In addition, the juristic person’s income tax and dividends are exempt from tax and there are double deductions available against the costs related to transportation, electricity and the supply of water.
As well as the very attractive tax incentives there are also other incentives that will make conducting business in Thailand a lot easier. These include relaxed rules regarding work permits in terms of the number of work permits that are available and the ratio of foreign employees to Thai employees. This will allow businesses to bring in more skilled foreign workers and experts to help develop the business.
Another attractive incentive is the capacity to purchase land, something that is not normally an option for foreign nationals. The benefits of this are plain to see and removes any threat posed by unscrupulous landlords. The fact that BOI companies also have protection against nationalisation should also give reassurances to entrepreneurs weighing up the pros and cons of investing in Thailand.
Companies can also benefit from fluctuations in the exchange rate as they will be permitted to remit money abroad in a foreign currency for conversation, if necessary, at a later date.
The BOI also have their finger on the pulse when it comes to the economic climate, both domestically and internationally, so offer time-sensitive incentives for companies already operating under a BOI license.
The Application Process
It would be foolhardy to suggest that BOI registration is the correct path for everyone to take, indeed it is aimed at larger investors looking to do business in the country. The process of becoming certified can be quite laborious with unexpected hurdles often being placed in the way, often leading to some companies pulling out of the applications altogether. Thankfully, the process is becoming easier although it is still advisable to seek the advice of professionals experienced with BOI applications before you start.
It can’t be stressed how important it is that you match ALL the criteria for the application. The application may be time consuming and painstaking but once you become certified by Thailand’s BOI a great number of opportunities will present themselves and you should have a very lucrative business for years to come.